How Much Severance Am I Entitled To in Ontario?

If you were recently laid off or terminated, one of the first questions you may have is:

“How much severance should I be getting?”

In Ontario, severance is not calculated using a simple formula. The amount you may be entitled to depends on several legal factors, including your length of service, your position, your age, and the current job market.

Understanding your rights before signing a severance offer can significantly affect the compensation you ultimately receive.

Why Severance Questions Are So Common Right Now

Over the past year, many employers across multiple industries have reduced staff as part of restructuring or cost-cutting efforts. While Canada’s overall layoff rate has remained relatively stable compared to historical averages, many employees report increased job insecurity and hiring slowdowns.

In periods of economic uncertainty, employers may offer only minimum statutory severance. However, minimum standards are not always the full legal entitlement.

What Does the Employment Standards Act (ESA) Require?

Under Ontario’s Employment Standards Act, employees who are terminated without cause are entitled to minimum notice or termination pay.

The amount of notice depends on length of service:

• 1 week after 3 months

• 2 weeks after 1 year

• Up to a maximum of 8 weeks

Some employees may also qualify for statutory severance pay if:

• They have at least 5 years of service, and

• The employer meets certain payroll thresholds

Statutory severance is generally calculated at one week per year of service, up to 26 weeks.

These amounts represent the minimum standards required by law.

Common Law Severance: Often Much Higher

Many employees are entitled to more than ESA minimums under common law principles.

Courts assess factors such as:

• Length of service
• Age
• Position and responsibility
• Availability of comparable employment

Common law notice periods can be substantially higher than ESA minimums — often several months of compensation, and in some cases significantly more.

Because common law analysis is fact-specific, many employees underestimate what they may be legally entitled to receive.

Does My Employment Contract Limit Severance?

Some employment agreements include termination clauses that attempt to limit severance to ESA minimums.

However, termination clauses must be carefully drafted to be enforceable. If a clause violates the ESA or is improperly written, it may be invalid.

If a clause is unenforceable, you may be entitled to full common law notice.

Should You Accept Your Severance Offer Immediately?

Employers often provide a deadline to accept a severance package. While deadlines are common, employees generally have time to review the offer and obtain legal advice.

Signing too quickly may prevent you from pursuing additional compensation later.

Before accepting any severance offer, it is often advisable to understand:

• Whether the termination was lawful, or whether it may qualify as a wrongful dismissal in Ontario

• Whether the amount offered reflects common law entitlement

• Whether bonuses, commissions, or benefits were properly included

How an Employment Lawyer in Milton Can Help

If you were recently terminated in Milton or anywhere in Ontario, reviewing your severance package with an employment lawyer can help determine whether the offer reflects your full legal rights.

A proper legal review can assess:

• Whether the termination complies with Ontario law
• Whether the severance offered is adequate
• Whether additional compensation may be available

If you would like to discuss your situation confidentially, you may request a consultation with an Employment Lawyer in Milton here.

This article is provided for general informational purposes only and does not constitute legal advice.